Bangsamoro gets ‘block grant’ aside from 75% wealth share

From the Daily Tribune (Jul 16): Bangsamoro gets ‘block grant’ aside from 75% wealth share

Aside from the already skewed 75 to 25 wealth sharing formula on the exploitation of resources and tax collections in the proposed Bangsamoro political entity, the new substate will enjoy an “annual block grant” from the government under the annex for the framework agreement signed the other day between the government and the Moro Islamic Liberation Front (MILF).

Government chief negotiator Miriam Coronel-Ferrer said the wealth sharing annex contains a formula that will be provided in the Basic Law on how such automatic appropriation comprising the annual block grant will be decided.

The automatic appropriations from the 75-25 deal will be deducted from the block grant, she said.

“But at the same time, there is another provision that says that revenues that the Bangsamoro earns from the additional taxes, including four additional taxes and whatever taxes may accrue to them in the future as well as the income from the revenues from natural resources shall be deducted from the annual block grant,” she said.

She said the whole intent in creating the Bangsamoro and providing it with vast powers is for it to be less dependent on the grant that comes from government.

“As soon as they are able to generate the resources on their own through peaceful environment that precisely would encourage the kind of economic activity, sustainable mining as well as exploration of the potentials as far as fossil fuels are concerned, as soon as they are able to generate a good share from these revenues, this will be deducted from the annual block grants,” Corornel-Ferrer said.

The exploitation of natural sources in the proposed Bangsamoro substate which will be heavily tilted at 75 percent to 25 percent in favor of the Moro Islamic Liberation Front (MILF) which will administer the substate, will cover “everything from above and below the ground” including the potential resources that are yet discovered such as uranium, Coronel-Ferrer told reporters yesterday.

Coronel-Ferrer and Presidential Peace Adviser Secretary Teresita Deles briefed Malacañang reporters yesterday on the details of the wealth sharing annex signed between the MILF and the government last Sunday that provides an unprecedented 75 percent Bangsamoro share in revenues from taxes and mining collected by the so-called “political entity.”

Coronel-Ferrer said the agreement also included uranium and oil, at an equal sharing terms, despite these resources not actually found to be existing in the proposed regions covered by the substate.

“In actual terms we are not talking about something concrete but we are envisioning that in the future, such resources are actually found to be commercially viable, explored and utilized, then the sharing with regard to government income from this economic activity will be equal,” Coronel-Ferrer said.

She said the 75 to 25 sharing ratio refers to the income to be generated from different resources which varies from one resource to another.

“So for instance, when we talk about metallic minerals, under a mineral production sharing arrangement or MPSA, the 75 percent that will go to the Bangsamoro is the 75 percent of the two percent excise tax paid by mining companies for the exploration and utilization of metallic minerals,” she said.

“When it comes to fossil fuel, the sharing arrangement with the companies is 60 percent for the national government of net income,” she said.

“When we say equal share, we are referring to the equal share in the 60 percent of the net income as far as fossil fuel or oil is concerned,” she said.

Coronel-Ferrer admitted the “unique provision” in the wealth sharing annex but she said the Bangsamoro automatic revenues would eventually be deducted from their annual appropriations.

“The first unique provision is that there will be automatic appropriation that will take away the constraints of the central budgeting process,” she said.

She said the uniqueness is almost similar to the ministerial form of government that will be introduced in the Bangsamoro.

She said the proposed Bangsamoro will enjoy something that local government units (LGUs) have been enjoying, which is the internal revenue allotment that is computed on the basis of a sharing ratio.

“As you know, the ARMM is almost, totally dependent on revenues or financial assistance coming from the central government. It does not speak well for autonomy; and I think you can give it to the MILF that they are really driven by that sincere desire to be able to stand,” she said.

“It is not a one-way partnership. Government giving everything to the Bangsamoro but also Bangsamoro sharing and contributing to the development of the whole country,” the chief negotiator said.

Coronel-Ferrer said that they are covering all grounds to ensure the full cooperation of the legislators “especially the new Congress that’s coming in next week”.

“We have been in constant discussions and consultations with key members of both the Senate and the House, and to that extent this is a common — we are confident that this is a shared project.

“We might have some disagreements in the future over certain details but I think what’s important is the sum total and the intentions are already very much shared between the Executive branch and the Legislative branch,” Coronel-Ferrer said.

In the normalization annex, Coronel-Ferrer said “this is where crunch time really comes for the MILF.

“We will be working on the decommissioning of combatants and weapons; and as you can imagine, that is something that is not easy to give up for a group that has held on to its arms in order to pursue its cause; and it is something that they cannot simply do when, in fact, there are so many other armed groups in the area. There are so many other, well, criminal groups, private armed groups, and so on.

So with regard to the normalization annex, there are still contentions on the phasing and the process as to how it will be done but the MILF has already committed to this.

It’s going to be part of the comprehensive agreement that alongside the political and economic deliverables will be these deliverables on their part,” Coronel-Ferrer said.
She said that the panels had been discussing the three annexes simultaneously ever since.

“It’s so happened that we move faster on the wealth-sharing. We are able to put together all the common points that — where consensus has been reached.

“We already have a good number of consensus points on the power-sharing annex as well as the normalization annex. So it is will be a contest between the two annexes which one gets to the finish line first,” she said.

Coronel-Ferrer said that the timetable is always a product of mutual deliberations.
“The point is we both know that we have to finish this as soon as possible so that we can get to the implementation as soon as possible and able to reach our goal within the framework of this administration,” Coronel-Ferrer said.

Deles, meanwhile, expressed elation over the partial result of the peace negotiations that took place in Kuala Lumpur, Malaysia which was considered by the panels as having gone through a “rough patch of difficult negotiations”.

“You know, we shouldn’t be surprised when some people express some dissatisfaction.
“In negotiations, it’s always because positions are far from each other and you negotiate and each side has to move. There is no negotiation where one side gets 100 percent. And so, it is… The call is to look at the big picture and I think, in the end, the political leadership of the MILF looked at it,” Deles said.

Deles was also well aware that their counterpart in the negotiations were not satisfied with the result of the signed wealth sharing annex.

“They are not happy with everything as that is the way it is. But, in the end, they decided—in light of the overall goal of everyone, and in light of what had already been conceded, and the roadmap that was already in the framework agreement—that this was the best at this particular time,” Deles said.

http://www.tribune.net.ph/index.php/headlines/item/16735-bangsamoro-gets-block-grant-aside-from-75-wealth-share